My Gold (XAU/USD) remains under mild selling pressure in Thursday’s early European session, slipping slightly but managing to stay above the key $4,000 level. Traders appear cautious as they await comments from Federal Reserve Chair Jerome Powell, while shifting fundamentals are keeping the yellow metal volatile.

Israel–Hamas Peace Deal Dampens Safe-Haven Demand

The announcement of the first phase of a peace agreement between Israel and Hamas, brokered through talks in Egypt, has eased some geopolitical concerns. As a result, investors have begun taking profits from gold’s recent rally, trimming safe-haven exposure after the metal hit record highs earlier this week.

Meanwhile, the US Dollar continues to strengthen, reaching its highest point since early August. Renewed dollar buying adds further downside pressure to gold, making the metal less attractive for holders of other currencies.

Dovish Fed Outlook and US Shutdown Risks Offer Support

Despite the firmer greenback, expectations that the Federal Reserve will begin cutting interest rates soon are preventing a deeper gold selloff. Minutes from the Fed’s September meeting showed that most policymakers favor easing monetary policy amid growing labor market concerns.

According to the CME FedWatch Tool, traders see a 93% probability of a 25-basis-point rate cut in October and a 79% chance of another cut in December. These expectations, combined with worries about the ongoing US government shutdown, are helping gold hold near the $4,000 mark.

The budget deadlock has entered its ninth day, with Congress once again failing to pass funding bills. The impasse raises the risk of economic slowdown and federal workforce disruptions, which could increase safe-haven flows into gold in the coming days.

Geopolitical Tensions Remain a Wild Card

In addition to Middle East developments, geopolitical risks remain elevated elsewhere. A senior Russian lawmaker warned that Moscow could target US missile launch sites if Washington proceeds with plans to supply Tomahawk missiles to Ukraine. Such warnings maintain an undercurrent of uncertainty in global markets, providing a soft floor for gold prices despite short-term weakness.

Technical Outlook: $4,000 Key to Bullish Continuation

From a technical perspective, gold continues to show resilience near the $4,000 handle, which acts as a strong short-term support level. The metal has rebounded from the lower boundary of a one-week ascending channel, suggesting that buyers are still active around that zone.

A decisive break below $4,000 could trigger further losses toward $3,948–3,947, followed by the next major support near $3,900. Conversely, if gold regains momentum above $4,035–4,036, it could retest the record high of $4,059–4,060. Sustained strength above $4,100 would confirm renewed bullish momentum and potentially set the stage for another leg higher toward $4,080–4,120 in the near term.

🟡 Key Market Takeaways

Gold remains under pressure amid easing geopolitical tensions.

The US Dollar’s renewed strength caps gold’s upside.

Fed rate cut expectations and US shutdown fears provide near-term support.

Technical traders are watching $4,000 as a key inflection point.